12. On December 31, Pane evaluates the companys research and development (R&D) activities conducted throughout the year to help develop a new bullet proof glass for the Department of Defense. Management determines that the company incurred the following costs related to the R&D activities:

Material used from inventory $95,000

Wages and Salaries (paid in cash) $151,000

Machine purchased for cash for the R&D project with a useful life of 1 year and no alternative future uses $47,000